Net income of $10 million. Earnings per American Depositary Shares (ADS) of $9 cents. Total operating revenue of $726 million, a 7.2% decrease. Total revenue per available seat mile (TRASM) increased 12% to $8.89 cents. Available seat miles (ASMs) decreased by 17% to 8.2 billion.
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VolarisMexico City, Mexico, July 22, 2024 – Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE: VLRS and BMV: VOLAR) (“Volaris” or “the Company”), the ultra-low-cost carrier (ULCC) serving Mexico, the United States, Central, and South America, today reports its unaudited financial results for the second quarter of 20241.
Second Quarter 2024 Highlights
(All figures are reported in U.S. dollars and compared to 2Q 2023 unless otherwise noted)
Net income of $10 million. Earnings per American Depositary Shares (ADS) of $9 cents.
Total operating revenue of $726 million, a 7.2% decrease.
Total revenue per available seat mile (TRASM) increased 12% to $8.89 cents.
Available seat miles (ASMs) decreased by 17% to 8.2 billion.
Total operating expenses of $660 million, representing 91% of total operating revenue.
Total operating expenses per available seat mile (CASM) increased 9.1% to $8.08 cents.
Average economic fuel cost increased 6.1% to $2.86 per gallon.
CASM ex fuel increased 11% to $5.33 cents.
EBITDAR of $261 million, a 23% increase.
EBITDAR margin was 35.9%, an increase of 8.8 percentage points.
Total cash, cash equivalents, restricted cash, and short-term investments totaled $774 million, representing 24% of the last twelve months’ total operating revenue.
Net debt-to-LTM EBITDAR2 ratio decreased to 2.9x, compared to 3.1x in the previous quarter.
Enrique Beltranena, President & Chief Executive Officer, said: “Volaris continues to perform positively, achieving our highest absolute EBITDAR for a second quarter despite the fleet groundings due to accelerated engine inspections. Volaris’ unwavering focus on execution and efficient cost control has enabled us to deliver strong results. Our mitigation plan is on track with favorable outcomes, and we have largely achieved our goals since the inspections began. In fact, we are improving our full-year ASM guidance to -14%3. We currently have a well-balanced market mix, with an increased presence in the cross-border market that has strengthened our TRASM, and our booking curves indicate ongoing robust performance for the summer high season.
With recent updates from Pratt & Whitney, we are cautiously optimistic about this evolving situation, but we recognize that the engine’s time on wing remains a challenge. Looking ahead, as grounded aircraft gradually return to our productive fleet, we expect recent unit revenue levels to remain resilient and remain committed to prudent and rational growth, prioritizing profitability.”
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Second Quarter 2024
(All figures are reported in U.S. dollars and compared to 2Q 2023 unless otherwise noted)
Total operating revenue amounted to $726 million in the quarter, driven by strong domestic demand and an improvement in total operating revenue per passenger. This represents a 7.2% decrease, notwithstanding the 17% reduction in total capacity resulting from aircraft-on-ground (AOG) due to Pratt & Whitney’s accelerated engine inspections.
Total capacity, in terms of available seat miles (ASMs), was 8.2 billion.
Booked passengers totaled 7.1 million, a 15% decrease. Mexican domestic and international booked passengers decreased 18% and 4.9%, respectively.
The load factor for the quarter reached 85.5%, representing an increase of 0.9 percentage points.
TRASM rose 12% to $8.89 cents, and total operating revenue per passenger stood at $102, representing a 9.8% increase.
The average base fare was $49, a 4.3% increase. The total ancillary revenue per passenger was $53, reflecting a 15% improvement. Ancillary revenue represented 52% of total operating revenue, up by 2.6 percentage points.
Total operating expenses were $660 million, representing 91% of total operating revenue.
CASM totaled $8.08 cents, a 9.1% increase when compared to the same period of 2023.
The average economic fuel cost rose 6.1% to $2.86 per gallon.
CASM ex fuel increased 11% to $5.33 cents, mainly due to the AOG due to Pratt and Whitney’s engine preventive accelerated inspections.
Comprehensive financing result represented an expense of $52 million, compared to a $43 million expense in the same period of the previous year.
Income tax expense was $4 million, compared to a $2 million expense registered in the second quarter of 2023.
Net income in the quarter was $10 million, with an earnings per ADS of $9 cents.
EBITDAR for the quarter was $261 million, a 23% improvement, primarily attributable to strong unit revenues and efficient cost control, partially offset by an increase in fuel prices. EBITDAR margin stood at 35.9%, up by 8.8 percentage points.
Balance Sheet, Liquidity, and Capital Allocation
For the quarter, net cash flow provided by operating activities was $304 million. Net cash flow used in investing and financing activities was $141 million and $149 million, respectively.
As of June 30, 2024, cash, cash equivalents, restricted cash, and short-term investments were $774 million, representing 24% of the last twelve months’ total operating revenue.
The financial debt amounted to $638 million, while total lease liabilities stood at $3,003 million, resulting in a net debt of $2,8677 million.
Net debt-to-LTM EBITDAR7 ratio stood at 2.9x, compared to 3.1x in the previous quarter and 3.5x in the same period of 2023.
The average exchange rate for the period was Ps.17.21 per U.S. dollar, a 2.9% appreciation. At the end of the second quarter, the exchange rate stood at Ps.18.38 per U.S. dollar.
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Source: Volaris
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